With the back-to-school shopping season round the corner,
various American apparel retailers have been posting positive July
sales and comparable store sales (comps) growth.
Following suit, WA-based retailer of sports-related teen apparel,
) reported a 3.5% rise in comps for the four-weeks ended Aug 2,
2014. This compares to a comps rise of 0.8% reported for the four
weeks ended Aug 3, 2013. The company's net sales for July soared
11.9% to $62.8 million from $56.1 million posted last year.
Looking at the trailing six months performance, we note that this
Zacks Rank #1 (Strong Buy) company has been delivering positive
comps every month, with the exception of March in which its comps
slipped 2.9% year over year. Per analysts, this could be
attributable to Zumiez's constant focus on its brands instead of
focusing on promotional activities.
Further, in first-quarter fiscal 2014, the company's comps grew
1.8% against a decline of 0.7% registered in the year-ago quarter
on the back of a rise in comparable store transactions, partially
offset by a decline in dollars per transaction. Moreover, comps
exceeded the company's initial forecast of a mid single-digit
decline driven by full price selling in the latter half of the
quarter as well as clearance of the excess inventory in the initial
Net sales for the quarter surged 9.7% year over year to $162.9
million and was above the Zacks Consensus Estimate of $160 million,
driven by better-than-expected growth in comps).
Looking into the second quarter of fiscal 2014, the company
anticipates revenues in the range of $174-$176 million, while comps
are likely to witness a single-digit rise.
Coming to the company's earnings, Zumiez reported adjusted earnings
of 10 cents per share, down 23.1% year over year but rising twofold
from the Zacks Consensus Estimate of 5 cents per share. Based
on sales projections for the second quarter, the company expects
earnings per share in the band of 19-21 cents. The current Zacks
Consensus Estimate for the same is pegged at 23 cents a share.
Other stocks in the same industry looking attractive at current
levels include Citi Trends, Inc. (
) and The Men's Wearhouse, Inc. (
), with the same Zacks Rank as Zumiez, and Foot Locker, Inc. (
), with a Zacks Rank #2 (Buy).
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